HMi meets… Elena Sterlin

Elena Sterlin, senior vice president, Vitality Health International

Elena Sterlin, Global Head of Health and Education at International Finance Corporation, talks to Adrian Murdoch about how the public and private sectors can best work together.

Elena Sterlin looks calm, relaxed and ready to answer questions. This is not something that a journalist would normally mention, but she is speaking to Healthcare Markets international towards the end of the first day of International Finance Corporation’s eighth Global Private Healthcare Conference in Miami.

As IFC’s global head of health and education, the bi-annual event is very much her show and she hasn’t moved out of the public eye all day.

She was on stage at 0900 delivering a perfect 15 minute introduction to a packed room of more than 450 delegates without notes and that I find out later she insisted on writing herself. And she has not stopped since.

Alongside the conference’s hectic and immersive programme, Sterlin has been conducting one-and-ones with clients and moderating private sessions.

The theme that runs like a thread throughout the two-day conference is how the public and private healthcare sectors can best find a way to work together. It is an inevitable first question and Russia-born Sterlin answers this, like all subsequent questions, thoughtfully.

For her it starts with the government. ‘In such sensitive sectors like healthcare and education, the public sector, the government, needs to be a guide to what it is that they want to do with their country, in what direction they want to take their country’s healthcare sector.’

The government’s role should be regulatory – ‘to make sure that private and public providers are working towards certain standards’ – and to form the institutions that provide the overriding strategy for the country’s healthcare system and the institutions that make sure that private or public players deliver.

The danger, she says, is when the government sticks its head in the sand and refuses to acknowledge the role that the private sector can play.


‘What we do see a lot,’ she says, ‘is that the government pretends that the private sector doesn’t exist, pretends that it is only playing on the fringes of the healthcare sector or is only for the rich.’

Sterlin points out that analysis in many of the countries in which IFC works reveals that the private sector already makes up around 50% or even more of healthcare delivery.

‘There should be private providers and public providers and you need to take advantage of the strength of both of them,’ she says.

‘The fear is of this informal uncontrolled sector running around. It is a much greater fear than just saying ‘let’s recognise them let’s admit them and let’s regulate them’.’

There remains, however, widespread opposition often conveyed through the media to private sector involvement in public healthcare. Does she really think that it is possible to get people to change their minds?

‘I honestly think that the easiest way is to start from the facts,’ Sterlin says.

She cites the issue of diabetes in Mexico. By any metric it is a huge issue in the country that affects around 20% of the population. ‘If you are in the government, you cannot take care of it and you have to find another solution,’ she says bluntly.

Of course that is not the way to present it to the government, instead it is a case of looking at where the private sector could help.

‘If waiting lists are three months long, then maybe that is the service for which you can look for alternative solutions, or you find a solution yourself. It is not a case of saying ‘let’s do it in private sector’, for me it is a case of asking the question and admitting that we have a problem. You have to ask yourself whether you can solve it or if you can find another solution. That might be the private sector’.

The easiest way to convince sceptics, she reckons, is to point to successful cases where it has worked.

She cites the Ribera Salud model in Spain – a public-private collaboration originally in Valencia which has delivered healthcare from hospitals to primary care since the end of the 1990s.

‘That is an incredible story. You have to point to stories like that. They are delivering a 25% saving on what the government delivered before,’ she says.

This is, of course, an admirable ideal. But there are, let’s face it, private sector healthcare companies and there are private sector healthcare companies. Given IFC’s work in emerging markets, how much of a consideration for Sterlin is this?

‘In some countries the regulatory system is strong enough that [governments] can identify and prevent any problem issues as much as possible. But in many countries where we work, this is not the case,’ she acknowledges.

What IFC generally does, Sterlin explains, is to sit down and to try to help individual governments determine what kind of private sector providers they want to work with.

To this end, the organisation has been working with providers, governments, specialists and academics to come up with high-level principles. ‘The idea is not to become a Bible on what is ethical and what is not ethical, but at least to agree on key principles,’ she says.

She argues that not having these principles in place is dangerous.

‘If you don’t achieve that, the damage you are doing in a medical institution is
actually worse than not having that medical institution,’ she says. More to the point it is something that she believes can be led by the private sector.

‘The private sector could guide this. As often happens, we think that it would be faster and easier to get the private sector to commit to these principles before the public sector,’ she explains.

Sterlin rightly bats away a question about problematic governments by pointing out that she does not work with the whole system – her focus and that of her team is on individual healthcare providers.

‘In a way that makes it a little easier for us,’ she says. ‘Before we come in [to a new country] we do thorough due diligence on providers. We go through multiple checks – legal checks, quality checks with healthcare specialists who go through all of the parameters,’ she says.

The conversation turns back to ethics. ‘The other things that we used to do and are reintroducing now is that when we fund a company, we attach a code of conduct which is based on ethical principles,’ she says.


Sterlin admits that this might sound heavy-handed but emphasises that ‘we are very particular about the companies in which we invest’.

At several points in the conversation, she describes a company’s first engagement with IFC as ‘tough’, ‘heavy’ and ‘painful’. But there is an upside.

‘Once you have crossed that line, there are companies with whom we have partnered for 20 years with multiple investments and we have taken them to different countries.’

There has been a notable shift in IFC’s investments over the past decade. While previously the attention was very much on tertiary and secondary healthcare and pharmaceuticals, that is starting to shift.

‘The cost of healthcare is rocketing. The main issue that we are seeing on the rise is the problem with chronic diseases. A lot of chronic diseases can be managed and prevented before the acute stage,’ she says. What that means is that the focus of IFC has moved to early diagnosis and the management of these diseases. ‘The other area that we want to move into is senior care and pharma,’ she adds.

But as markets and investors have realised that healthcare is a blue chip sector, valuations have shifted sharply upwards in recent years.

Private equity funds have been chasing healthcare names, which has driven up prices across the board in almost every emerging market.

This is not, however, a problem that affects IFC. ‘What we tend to do – and we pride ourselves on this – is that we think we are the first ones to come in [to a segment],’ she says.

‘When we came to India, no one wanted to fund Indian healthcare and we gave equity to Apollo Hospitals, Fortis Healthcare and Max Healthcare. Now, 15 years later they are unique assets, but it took 15 years to get here.’

She leans forward to make her final point.

‘But this is a high risk proposition. Are you comfortable going to India when the private sector healthcare delivery is just starting and betting that this is going to be a big success?’ The role of IFC, she says, is to go back to fundamentals.

‘What we say is: ‘The government isn’t putting the money in, the private sector is good and there are lots of doctors. We think that the fundamentals are really good and we are willing to bet on it. Let’s now find the right partner’.’

Later that evening there is a cocktail reception. Sterlin is working the floor. She can be seen with a delegation from Saudi Arabia, then with a hospital operator from Nigeria, a quick break with her colleagues and then with the owner of a number of clinics in Mexico.

For Sterlin the work never stops.